Foster City, Calif. (GlobeNewswire) February 23, 2015 – Americans who begin saving money for retirement in their 20s are 66 percent more likely to expect an early retirement than those who start saving in their 30s, according to a new survey from MoneyRates.com.
The survey also indicates that just 27 percent of respondents began saving for retirement in their 20s, and that barely half began saving before age 40. Richard Barrington, CFA, senior financial analyst for MoneyRates.com and author of the study, says that the advantage for early savers is largely due to the way those early savings compound over the course of decades.
“Saving for retirement is a big job, so the way to make it a little easier is to spread it over a greater number of years,” Barrington says. “This gives you more time to accumulate savings, and a longer period to let the compounding of investment returns work for you.”
The survey also finds that women appear to be beginning their savings efforts later than men, much to the detriment of women’s retirement expectations. Only 25 percent of women began saving for retirement in their 20s, compared with 30 percent of men. Perhaps consequently, just 57 percent of women expect to retire by age 70, compared with 78 percent of men.
“Women may have more trouble saving because they earn less on average, and this creates the additional burden of greater retirement uncertainty,” Barrington says. “Whatever your income, making any effort you can to start saving for retirement is the best way to fight against that uncertainty.”
Savers who don’t begin saving by age 40 may have additional trouble getting started, according to the survey. The percentage of respondents who reached age 40 with no retirement savings (29 percent) virtually mirrors the percentage of respondents who reached age 50 (30 percent) and age 60 (29 percent) with no retirement savings.
For more details on the survey, please see www.money-rates.com/research-center/early-retirement-savings.htm.
Methodology This survey was conducted online by Op4G on behalf of MoneyRates.com. It polled more than 1,900 U.S. adults age 25 or older, with an even split between men and women.
About MoneyRates.com MoneyRates.com has been a leading source of information on bank rates, personal finance, savings accounts and investing since 1999. The site seeks to provide the highest rates on CDs, money market accounts and high-yield savings accounts.
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